South Dakota
House committee squashes half-century tax break for SD data centers
PIERRE — Controversial data centers built in South Dakota won’t get a sales tax break—at least not yet.
The House State Affairs committee met Feb. 4 to weigh House Bill 1005, a bill which would have given owners and operators of qualifying data centers exemptions on the state’s sales and use tax for investments made in computer software and “enterprise information technology equipment”—a wide array of computer hardware, servers, power infrastructure, maintenance and security systems.
The exemption would apply to data centers that are issued a building permit between July 1 and June 30, 2036.
Data centers are physical facilities that house servers and networking equipment, which are typically used to store, manage, process and distribute large amounts of data.
Some of the common types of modern data centers include:
- AI data centers, which are specifically designed to support artificial intelligence applications;
- Colocation data centers, where third-parties manage the servers and components;
- Cloud data centers, where major providers, like AMS, Microsoft and Google, host cloud-based data and applications; and
- Enterprise data centers, which are often used for private uses by corporations.
Particularly large data centers are sometimes known as “hyperscalers.” These facilities can cost hundreds of millions to billions of dollars and require hundreds of acres of land to build, with construction at-times occurring in multi-year phases.
The legislation would have required businesses to submit documentation to the secretary of the state Department of Revenue, who would determine if the data center’s eligibility for the tax exemption.
A data center would have been able to receive the break if it could prove the facility’s electrical demands were under a written agreement or rate schedule that avoids shifting electrical costs to other consumers; and notice was given to local water providers that the site’s water consumption was “compatible for the location,” per the bill’s language. Data center owners would have also had to file an annual affidavit that discloses whether the business continues to meet the eligibility criteria.
However, those documents would have been considered confidential under the proposed legislation.
The bill was rejected by the committee, with nine members voting for and three against the legislation. Sioux Falls Republican Bethany Soye was excused from the vote.
Supporters of the legislation told committee members the sales tax break was essential to give data center investors and developers enough incentive to build in the Mount Rushmore state.
State Rep. Kent Roe, R-Hayti, who drafted the legislation, urged the committee to green-light the tax break on the premise that the state would reap a bounty of benefits—from “immense” property tax revenue and the creation of new high-quality jobs, to diversifying the state’s economic makeup.
Roe said other states have already legislated or otherwise implemented sales tax exclusions, and South Dakota needs a similar policy to remain competitive.
“We tax this technology higher than most,” Roe said. “That’s the truth. President Trump has stressed America’s need to lead. Our senators and congressmen highlight AI’s role in health care and national security. This is a national concern.”
Data center lobby uses well-worn revenue pitch
Steve DelBianco, president of NetChoice, a D.C. e-commerce trade group, threw out big numbers to buoy the benefits argument. Over the next 10 years, he projected $333 milllion of new property tax revenue to South Dakota from data centers alone.
For Jay Grabow, chair of the Deuel County Commission, the existential crisis his area faces is real. In 1920, per historical U.S. Census publications, Deuel County once called 8,759 people local inhabitants. Fast-forward to 2024, the county’s population has more-than-halved to 4,335, according to the U.S. Census Bureau.
Some of that Grabow attributes to the farming industry becoming more efficient over time—driving people per acre down—and the loss of at least one 200-employee business.
That means increased taxes over a smaller taxable population, Grabow said. And it also means Dallas-based Applied Digital, which is proposing a 430 megawatt AI data center east of Toronto, South Dakota, is, in the commissioner’s eyes, a means to lowering property taxes.
“We’re merely trying to keep what we had, merely trying to figure out a better way to do property taxes than to burden it on the people,” Grabow said. “If we can spread that across a $400 million billing, we have $1.1 billion of assets today. That’s a nearly-40% increase on our assets that we can spread those taxes across. That’s a 10 to 15% property tax [cut] across the board for those people.”
The economic windfall arguments resembled the debate over carbon pipelines over the last several years, when pipeline companies and some analysts projected an Iowa company’s transmission line could generate billions in the state and lower local taxes, as seen in previous Argus Leader reporting.
DelBianco said businesses and governments have increased their use of the cloud in recent years. The tech industry is tasked with building 50 data centers a year to keep up with U.S. demand, he added.
But the supply can’t be met if South Dakota doesn’t give developers and businesses a big-enough carrot to offset the significant capital investments they would make, DelBianco said.
Nick Phillips, executive vice-president for external affairs of Digital Applied, said South Dakota has been “unintentionally tax[ing] itself out of this market” under the current tax policy.
“The siting decision is binary,” Phillips said. “A project is built here or it is built somewhere else … Other states are capturing the investment, the jobs, and the long-term tax base.”
“The truth is that it’s just fiscally irresponsible to spend a billion dollars on a data center and have the equipment [that] goes in there, be subject to sales tax, when a billion dollar manufacturing, agricultural, another facility doesn’t pay sales tax on its equipment,” DelBianco added . “There are 40 states that exempt the equipment, so we have to pick the states that welcome through that policy.”
Data center opposition says tech threatens South Dakota’s largest industry
But opponents viewed the Big Tech push as an infringement upon South Dakota’s already No. 1 industry: agriculture.
Michelle Oftedahl, a Toronto, South Dakota, farm owner who lives a few miles away from Applied Digital’s proposed data center, spoke to the “unintended consequences” of boosting data centers. Farmland often out-prices what young farmers can afford to break into the ag industry, Oftedahl said, but it’s not too much for corporations with billions of dollars to spare.
Incentivizing data centers, the fifth-generation farmer added, would give rise to companies “buy[ing] land up cheap, knowing that they can cash in on possible future expansion projects, such as power plants, substations, and transmission lines, things that are needed to support the high amount of energy production required.”
“Encouraging large-scale economic development like data centers risks discouraging many young people from choosing agriculture for their future,” Oftedahl said. “This isn’t simply a vote about a sales tax exemption. It’s a statement about our values. Is South Dakota still first and foremost an ag state, or is large industrial economic [sic] now more important?”
Sara Steever, a retired Lennox resident who formerly led Sioux Falls agri-marketing agency Paulsen, questioned whether companies “worth billions and trillions of dollars” needed the tax breaks.
“Turns out that the fact that we can provide access to the megawatts of energy that is needed is tremendously valu[able],” Steever said as a remote testifier. “These companies don’t need tax breaks. They need connectivity, which we already have.”
Dakota Rural Action Lobbyist Melissa McCauley said the bill would lead to a “huge miss on revenue” for the state, given what she perceived as the broad nature of the proposed exemption.
“We are concerned that nearly everything needed to outfit the data center down to its door locks, security cameras, and even the cost of laying the fiber to the center would be exempt,” McCauley said. She asked openly whether a fiscal note should be added to the bill.
Tax break eligibility would not be public record under Roe bill
The stipulation that a data center’s eligibility documents would not be public record rankled opponents—some lawmakers, too.
Austin Adee, a Deuel County resident, said that section of the bill would create an “NDA-shielded secret court.” House Speaker Jon Hansen, who is running for South Dakota governor in 2026, raked the measure over this.
“This particular measure lacks transparency,” said House Speaker Jon Hansen. “The information goes to the secretary of the Department of Revenue, who can unilaterally decide without real qualification whether or not there’s going to be a tax break or not, whether or not rates are going to pass on, whether rate increases are going to pass on to consumers, and the people aren’t entitled to see any of the documentation that supports that decision. I think that’s wrong.”
The bill split the few Democrats on the committee, with Rosebud State Rep. Eric Emery supporting the legislation and House Minority Leader Erin Healy, of Sioux Falls, against it.
Emery asked Roe if the initiative behind the data center push included any guarantees that they would bring the promised jobs and wage-growth, to which Roe responded, “there’s no guarantees.”
Roe expounded upon this later, though, by pointing to the property tax revenue Applied Digital would likely bring to Deuel County—”north of $5 million” per annum, the Hayti lawmaker said, which is close to half of the county’s total budget.
At one point, Emery made a motion to send HB 1005 to the floor without a recommendation from the committee. Assistant Majority Leader of the House Marty Overweg spurned the idea, calling it “bad committee policy.” The motion died on a 5–7 vote.
Healy noted the day’s hearing lacked testimony from Sioux Falls stakeholders, despite a surge of public input in the city.
“I do believe that there is potential economic impact for data centers, but I also believe that economic development should never move faster than public input and transparency and also accountability,” Healy said.
House members will likely have to take up the debate once more during the 101st Legislative Session, as State Sen. Casey Crabtree, a Madison Republican who works for an area energy provider, filed a similar bill in the hours after the committee’s Feb. 4 decision.
The new legislation, a self-titled “Data Center Bill of Rights for Citizens”—akin to Crabtree’s 2024 “Landowner Bill of Rights,” which offered concessions to carbon pipeline opponents in order to ease pipeline development in South Dakota—also intends to exempt data centers from paying a sales and use tax for purchases made in developing a site, while also clarifying regulatory authority and preventing electric rate shifts onto consumers.
Crabtree’s bill does not provide an end-date on the sales and use tax exemption.
The South Dakota Lottery offers multiple draw games for those aiming to win big.
Here’s a look at July 8, 2026, results for each game:
Winning Powerball numbers from July 8 drawing
12-29-37-43-55, Powerball: 18, Power Play: 4
Check Powerball payouts and previous drawings here.
Winning Lotto America numbers from July 8 drawing
17-26-31-32-37, Star Ball: 01, ASB: 02
Check Lotto America payouts and previous drawings here.
Winning Dakota Cash numbers from July 8 drawing
07-11-18-31-33
Check Dakota Cash payouts and previous drawings here.
Winning Millionaire for Life numbers from July 8 drawing
16-18-43-48-50, Bonus: 01
Check Millionaire for Life payouts and previous drawings here.
Feeling lucky? Explore the latest lottery news & results
Are you a winner? Here’s how to claim your prize
- Prizes of $100 or less: Can be claimed at any South Dakota Lottery retailer.
- Prizes of $101 or more: Must be claimed from the Lottery. By mail, send a claim form and a signed winning ticket to the Lottery at 711 E. Wells Avenue, Pierre, SD 57501.
- Any jackpot-winning ticket for Dakota Cash or Lotto America, top prize-winning ticket for Lucky for Life, or for the second prizes for Powerball and Mega Millions must be presented in person at a Lottery office. A jackpot-winning Powerball or Mega Millions ticket must be presented in person at the Lottery office in Pierre.
When are the South Dakota Lottery drawings held?
- Powerball: 9:59 p.m. CT on Monday, Wednesday, and Saturday.
- Mega Millions: 10 p.m. CT on Tuesday and Friday.
- Lucky for Life: 9:38 p.m. CT daily.
- Lotto America: 9:15 p.m. CT on Monday, Wednesday and Saturday.
- Dakota Cash: 9 p.m. CT on Wednesday and Saturday.
- Millionaire for Life: 10:15 p.m. CT daily.
This results page was generated automatically using information from TinBu and a template written and reviewed by a South Dakota editor. You can send feedback using this form.
LARCHWOOD, Iowa (KIWA) – A Tea, South Dakota man has been arrested on a felony domestic abuse charge after an incident near Larchwood.
According to a criminal complaint filed with the Lyon County Clerk of Court’s Office by the Iowa State Patrol, 45-year-old Beau Christensen of Tea is accused of assaulting his girlfriend in their hotel room at Grand Falls Casino & Golf Resort near Larchwood. He was arrested on Wednesday, July 8.
In his statement, the state trooper who filed the report says Christensen put his hands around the victim’s neck. The victim stated she could not breathe while this was happening.
Christensen was charged with domestic abuse assault – impeding air or blood flow, a class D felony. If convicted, he could face up to five years in prison. He also faces a misdemeanor charge of possession of marijuana.
He faces a preliminary hearing on Friday, July 10.
At last report, Christensen remained in the Lyon County Jail in Rock Rapids in lieu of a $6000 bond.
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BROOKINGS, S.D. – Instead of boarding airplanes or planning weeklong vacations, many South Dakota families are spending summer weekends closer to home, filling festivals, community events and family attractions that offer affordable ways to make memories together.
That trend is showing up across the state, according to South Dakota tourism officials. And organizers of many local events say they’ve watched it evolve over decades.
“We did re-coin that term ‘staycation’ again this year,” said Shari Budahl Avery, publicity chair for the 55-year-old Brookings Summer Arts Festival. “If things are a little tight but you want to get away for a day, we can provide that experience.”
Families are redefining summer travel
Travel South Dakota has reported that many travelers are choosing more affordable destinations, taking shorter trips and staying closer to home because of continued economic uncertainty. The department said South Dakota is well positioned because many visitors already travel by car from nearby states.
According to the department, 58% of visitors travel within 150 miles of home, and affordability, scenic beauty and family experiences remain among the state’s strongest attractions.
Travel South Dakota reports that visitors rate the state highly for affordability and family experiences, with 87% saying they would recommend South Dakota to others and 90% planning to return.
Shawn Steward, public affairs manager for AAA South Dakota, said travelers look for ways to make summer vacations fit their finances rather than canceling them altogether.
“People still want to travel,” Steward said in an interview with South Dakota News Watch. “They’re just making different choices.”
Steward said many families are adjusting by taking shorter trips, traveling by car instead of flying or choosing destinations closer to home, trends that align with what tourism officials and local event organizers are seeing across South Dakota.
Local events become summer destinations
Budahl Avery said those statewide trends match what festival organizers have observed for years.
“We’re kind of dead center in a pretty good population center,” she said. “People can come on what one friend from Texas called a ‘tank trip’ – somewhere you can drive on one tank of gas and get home.”
The two-day festival features about 178 juried artists, live entertainment, children’s activities, food vendors and historical demonstrations. Budahl Avery said the goal is to create an experience where multiple generations can spend time together without needing an expensive vacation.
Affordable, convenient entertainment
During a recent stop in Brookings, the Cardin International Circus drew families from across the region. Ringmaster and comedian Rulito Videla said attendance varies from city to city, but he believes many families are looking for affordable experiences closer to home.
“If they are staying home, support your local events,” Videla said. “The circus is family-oriented entertainment. You create memories.”
Visitors interviewed in Brookings described making similar choices.
Erica Quam said her family often prefers several smaller outings over one major vacation.
“We live right near Brookings,” Quam said. “It’s close, there were some coupons that made it more affordable, and it’s just a fun, easy activity.”
Sienna Vanmeveren also chose to stay closer to home this summer to save money.
“It’s easier than traveling somewhere,” she said, adding that she would likely travel more if finances allowed.
Not every family is changing its travel habits.
Sviatlana Senchanka said her family recently completed a road trip from South Dakota to California and continues to spend time outdoors at local lakes. She said work schedules determine when her family travels more than travel costs.
For Budahl Avery, however, the value of community events extends beyond economics.
“What keeps families coming back?” she said. “Tradition. Joy. Making memories.”
Whether families travel across the country or simply across town, organizers and visitors alike say a memorable summer doesn’t always require going far from home.
South Dakota News Watch is an independent nonprofit. Read, subscribe for free and donate at sdnewswatch.org. Amina Aidarkhanova received the 2026 Jeffrey B. Nelson Investigative Journalism Endowed Internship and the Chuck Raasch and Sandy Johnson Scholarship from the SDSU Foundation. Contact: amina.aidarkhanova@sdnewswatch.org.
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